News Roundup

Corzine Finalizes Highway Toll Increase Plan of 50 Percent-Plus
NJ.com (01/08/08) Howlett, Deborah; Donohue, Joe

Tolls would increase every four years and be lengthened all the way to New Jersey's Route 440 under the economic restructuring proposal Gov. Jon Corzine is expected to announce in Tuesday's State of the State speech. Any additional or higher tolls listed in the plan would allegedly not be obtained until 2010 or later. It is said the plan consists of a 50-percent increase every four years combined with yearly cost-of-living hikes. Three people involved in designing the plan admit that Corzine consented to tolls on Route 440--five miles of highway between the Turnpike and the Outerbridge Crossing to Staten Island--because between 30 percent and 40 percent of drivers utilizing the road are from other states. People familiar with the proposal stress that enacting tolls on Route 440 is crucial if New Jersey is to obtain anything near the $40 billion Corzine is aiming for in his campaign to "monetize" New Jersey's toll roads. The plan is actually predicted to yield around $30 billion for New Jersey. Corzine stated he intends to pay off a minimum of 50 percent of New Jersey's $32-billion in debt with the proceeds.
(http://www.nj.com/news/index.ssf/2008/01/corzine_finalizes_highway_toll.html)

Macquarie Builds Infrastructure Funds
Wall Street Journal (01/07/08) P. C4; Skelly, Keenan

Macquarie Capital Funds--a division of Macquarie Group of Australia--is working to generate almost $18 billion for a pair of funds. Macquarie Capital Funds wants $11.8 billion for Macquarie European Infrastructure Fund III, and $6 billion for Macquarie Infrastructure Partners II. If it is pulled off, the European fund would be the biggest closed-end infrastructure fund ever. The two funds will invest in infrastructure-associated assets, including toll roads, port, and utilities. Macquarie II will invest in Europe, while Macquarie III will concentrate on North America. Macquarie II has over 60 percent of the funds committed, while Macquarie I has over 85 percent committed. Investments include the Indiana Toll Road and the Chicago Skyway toll road.
(http://online.wsj.com/public/article_print/SB119966191146970997.html)

Private Instigator
Governing (01/08) P. 38; Greenblatt, Arthur

Indiana Gov. Mitch Daniels has gotten a reputation as being the most privatizing governor in the country, as a result of his decision in 2006 to lease the state Toll Road to a private consortium. In exchange for receiving $3.85 from the consortium, Daniels claims Indiana has been able to finance 200 projects that had formerly been stalled. There has been some public opposition, however, to the fact that the consortium is foreign, and other opponents feel that Daniels has relinquished too much to it. The toll-road plan is regarded as the best example of Daniels' entire attitude towards government. "He's not afraid to advocate and push for ideas that may be a little politically on the dangerous side," says Indiana House Speaker Patrick Bauer, possibly the most boisterous critic of the governor's privatization initiatives. He refers to the toll-road lease as "a very, very bad deal," contending that the state could have obtained much larger returns by continuing to oversee the road itself. The substantial political fallout Daniels underwent because of the lease has also been educational to other governors, who have become more wary about discussing their own toll-road proposals.
(http://www.governing.com/articles/1daniels.htm)

Cost of Turnpike Closing in on $1B
Triangle Business Journal (01/07/08) Baysden, Chris

The North Carolina Turnpike Authority (NCTA) is attempting to speed up the pace of construction for the recommended Triangle Expressway toll road even though expenses are increasing substantially and the status of a vital piece of financing has not been resolved. The authority has started advertising the design-construction project to contractors and would like to accept bids next month or in March, even though the NCTA has not been able to obtain the "gap funding" it requires for the 18.8-mile highway. In addition, the project's cost has risen to around $950 million, due to inflationary increases on materials and right-of-way acquisitions. Just a certain amount of the project can be funded via the issuance of bonds, and the authority had wanted to acquire a commitment of between $18 million and $20 million annually--or $250 million overall--from the North Carolina General Assembly in 2007 to make up the difference. Various bills offering financing were approved in the different legislative chambers, however, and there was not time for a conference committee to resolve them. As such, the authority is asking contractors to take a chance on the time and cost they would undertake to bid on a proposal that does not yet have economic approval, something they might not be willing to do. NCTA executive director David Joyner thinks, though, that the General Assembly will come through with the gap money.
(http://triangle.bizjournals.com/triangle/stories/2008/01/07/story4.html)

Cost of M6 Motorway Toll Soars by 50 Percent
Telegraph.co.uk (01/08/08) Hope, Christopher

Authorities are pondering an investigation into the MP toll road, Britain's sole privately-held motorway, as the price of using it has soared by 50 percent in only four years. The newest price increase occurs after a half-million drivers ceased utilizing the road in only three months. The 27-mile M6 toll road, which stretches to the northeast of Birmingham, was launched in December 2003 to reduce heavy traffic on the M6 through that city. Since then, though, the Midland Expressway--the private firm that constructed the road and oversees the tolls--has raised the fee for automobile drivers from three British pounds sterling to four stg. The latest hike, by 50 pence to 4.50 stg., was enacted on Jan. 1. While more than 17 million motorists are employing the toll road annually, the amount of vehicles driven on it during the three months to September 2007 dropped by over 500,000. But the typical rate of motorists using the road--48,929 vehicles per day--is thought to be beneath experts' predictions for the traffic amounts before the road was constructed.
(http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2008/01/08/ntoll108.xml)

Cost of Ticket to Ride Thruway Rises
Albany Times Union (NY) (01/06/08) Woodruff, Cathy

Cash tolls were scheduled to rise by 10 percent at midnight on Jan. 6 in the last stage of a series of hikes sanctioned by New York State Thruway Authority in 2005. Due to the increasing popularity of the E-ZPass, however, the toll increase should be less onerous this time, noted New York State Motor Truck Association president Bill Joyce. Because cash tolls are increasing while E-ZPass tolls are staying the same, the value of E-ZPass discounts will rise. While the 45-cent E-ZPass toll between Albany Exit 23 and Schenectady Exit 25, for instance, signifies a 10 percent discount from the previous 50-cent cash toll, it offers an discount of 18 percent over the new cash toll of 55 cents. In addition, more drivers and companies are qualifying for the discount as the economic incentive grows stronger. The amount of E-ZPass accounts is around 25 percent more since the discount plan took effect in May 2005, the authority noted. Currently, over 61 percent of Thruway transactions at toll booths, bridges, and barriers are performed utilizing E-ZPass, compared to 25 percent a decade ago. There continues to be certain drivers, though, who do not wish to use E-ZPass, and as such are against the latest toll hike.
(http://timesunion.com/AspStories/story.asp?storyID=652867&category=FRONTPG&BCCode=HOME&newsdate=1/6/2008)

A Turning Point for Transit
New York Times (01/06/08) P. 14LI-1; Belson, Ken

Legislators in Connecticut, New Jersey, and New York are predicted to address in 2008 how to finance long-term transportation mandates. The most important decisions may occur in New Jersey, where the Transportation Trust Fund, which maintains and improves that state's highways, is in bad shape. Gov. Jon Corzine is expected to suggest initiating a public corporation that would dispense bonds backed by future toll hikes, which would help lower debts and fund the expansion of the New Jersey Turnpike and additional million-dollar measures. Toll hikes are also a distinct possibility for motorists who utilize the bridges and tunnels that stretch across the Hudson River and Metropolitan Authority's New York City crossings. Despite the increase in costs, transportation analysts stress that drivers will just witness limited service upgrades in 2008. "In a nutshell, you have more people needing to use more facilities," explains Regional Plan Association senior transportation fellow Jeffrey M. Zupan. "You have to provide more service, yet you don't have enough funds, so you have to raise prices with no guarantee you'll get an improvement." Analysts add that while costs for using mass transit have increased more rapidly than bridge and highway tolls over the last few decades, bus and train operators are paying more for gas, staff, and land.
(http://www.nytimes.com/2008/01/06/nyregion/nyregionspecial2/06RtransitNJ.html?ref=nyregionspecial2)

President Calls on Nation to Support Toll Road Construction Projects
Antara (Indonesia) (01/08/08)

Indonesian President Susilo Bambang Yudhoyono has called for cooperation among all relevant parties in making toll road construction projects a success. "For the sake of the public interest, I ask all parties to make toll road construction efforts a success," the President said at a press conference after Public Works Minister Joko Kirmanto explained about the projects at the Public Works Ministry here on Tuesday. The head of state admitted that land clearance problems were considered a major stumbling block in the construction of toll roads in the country. Yudhoyono said in relation with road infrastructure development, toll road construction was one of the government's top priorities. He said the government had decided to build a total of 1,119 kilometers of toll road in the country over the next three years.
(http://www.antara.co.id/en/arc/2008/1/8/president-calls-on-nation-to-support-toll-road-construction-projects/)

Toll Road Cash Gives Ohio River Bridges Key Support
Northwest Indiana News (01/05/08) Benman, Keith

The Federal Highway Administration has approved a proposal that would take proceeds generated from the Indiana Toll Road lease to underwrite the state's portion of its $4.1 billion joint bridge project with Kentucky. Under the financial plan, money from the Indiana Toll Road lease will be used to finance Indiana's $1.1 million share of two new bridges that will run the length of the Ohio River. One bridge will connect Utica, Ind., to Jefferson County, Ky, while another will run through downtown Louisville to Jeffersonville, Ind. The financing will be take from a $3.8 billion lease Indiana signed with a foreign consortium in June 2006. Kentucky is still working out the terms for its $2.9 billion share of the project.
(http://www.nwitimes.com/articles/2008/01/05/business/
business/docdc9e2020e6e79c48862573c600755c03.txt)

Traffic Control Device Rules Strengthened in New Publication
Federal Highway Administration Release (01/03/08)

The U.S. Federal Highway Administration has proposed amendments to the next edition of the Manual on Uniform Traffic Control Devices in response to a bus crash in Atlanta last March that some have blamed on confusing highway signage and pavement markings. Seven people were killed and 29 injured in the accident that occurred when a bus drove off an overpass. Among the proposed changes for next year's edition of the manual are stronger guidance on Guide Signs and Preferential Lanes, requiring all HOV lane signs to be consistent in having a green background and white legend. Clearly worded signs are also mandated for left-side direct exists in preferential lanes and for all left-side exists. A proposed new section in the manual would provide guidance on the maximum amount of information that can be understood by drivers based on speed and distance, the allowable number of messages on a sign, brightness levels, and display times for messages. "We know what can happen when too many signs, or too few, make it difficult for motorists to make informed decisions," says Federal Highway Administrator J. Richard Capka. Also proposed are better HOV-lane pavement markings comprised of diamond-shaped symbols throughout a lane and at important traffic decision points, like where lanes separate.
(http://www.fhwa.dot.gov/pressroom/fhwa0801.htm)

Opposition Targets 'Unfair' Toll Refunds
ABC Online (Australia) (01/04/08)

Australia's New South Wales Opposition claims the majority of motorists are missing out on a government plan that subsidizes drivers on the M4 and M5 motorways. The Sydney Morning Herald claims the decade-old Cashback plan has cost over A$350 million and is predicted to cost A$869 million by 2010. Opposition transportation spoken Duncan Gay states it is a costly plan that just benefits certain motorists. "A large part of Sydney and NSW miss out on the Cashback," he notes. "The people that have to travel from the north and the north-west, the people who have to travel on the M2 [and] the Harbour Bridge miss out on this sort of help." Opposition leader Barry O'Farrell claims he will deal with the matter prior to the next election. He adds that the current goal is to study every toll-road policy, the differential tolling that takes place, and how some money can be returned to the system.
(http://www.abc.net.au/news/stories/2008/01/04/2131779.htm)

Soon, Roads Could Start Tolling for Carlyle
Washington Post (01/03/08) P. D1; Heath, Thomas; Cho, David

Washington, D.C.'s Carlyle Group has generated $1.15 billion for an infrastructure fund that it will utilize to work with federal, state and regional governments in operating important public projects in this country, including bridges, tunnels and airports. Recently, a consortium of private companies closed an agreement to construct high-occupancy vehicle toll lanes on the Virginia Beltway. Carlyle would like to take part in an expansion of Interstate 270 in Montgomery County, Md., that would lessen traffic congestion. The Carlyle Infrastructure Partners fund can operate the majority of airports, highways and water systems better than public officials and governments currently doing the job, claims co-manager Robert Dove, and also earn a profit for investors. Transportation analysts, however, predict opposition to the idea of government handing over important roads, ports and utilities to for-profit private companies that do not have to disclose a lot about their business. The matter is also generating questions about who would oversee the safety and security of these projects. Carlyle's new fund permits overseas investors to buy U.S. infrastructure directly.
(http://www.washingtonpost.com/wp-dyn/content/article/2008/01/02/AR2008010202988.html?hpid=sec-business)

Australia's Lowest Road Toll In A Decade
Herald Sun (AU) (01/05/08)

Australia logged its lowest record in 10 years for toll-road related deaths over the holiday season. Australia posted a total of 45 deaths on its roads in 2007, compared to 61 the previous year. Queensland also saw a drop in road deaths, with four deaths, down from 13 in 2006. New South Wales posted the fewest number of fatalities, with seven, versus 19 last year, while Victoria logged the highest at 17 fatalities. Western Australia also saw a surge in road toll deaths, with 11 in 2007, up from six in 2006.
(http://www.news.com.au/heraldsun/story/0,21985,23009711-5005961,00.html)

Lease Turnpike, Rendell Says
Daily Item (01/05/08) Keister, Amanda

Pennsylvania Gov. Ed Rendell announced on Friday he is in favor of revisiting his initial plan to lease the state's Turnpike to a private company to generate funds for repairs of Pennsylvania highways and bridges and to offer financial assistance to mass-transit groups. "I always have said my original plan to lease the turnpike would produce, I think, anywhere from $200 (million) to $500 million a year more that we can put into bridges, roads and highways and mass transit, and it doesn't require tolling I-80," Rendell noted. The Federal Highway Administration, which must sanction the I-80 tolling proposal, recently rejected the application procedure by requiring additional information from the Pennsylvania Turnpike Commission, providing toll foes hope that the plan will fizzle out in Washington, D.C. Rendell stated that bids are being obtained from companies that want to lease the turnpike, which he hopes to bring before the Pennsylvania Legislature in March. The tolling concept has been compared to double taxation, a tax in addition to taxes already paid to keep up Pennsylvania's highways. Whether or not it is double taxation, Rendell said, infrastructure upgrades are necessary in his state, and the funds have to come from someplace.
(http://www.dailyitem.com/homepage/local_story_005003316.html)

Skyway Union Seeks Stop Order
BusinessWorld (01/04/08) P. S1/10; Ramos, Marian Grace S.

PNCC Skyway Corp. employees asked a court on Thursday to keep the new managers of the Skyway system from taking control of the tollway operator. The PNCC Skyway Corp. Employees Union (PSEU) and PNCC Traffic Management and Security Departments Workers Organization filed a temporary restraining order before the Paranaque Regional Trial Court which attempted to prevent the installation of the Skyway's Amended Supplemental Toll Operators Agreement (ASTOA). The ASTOA permits state-held Philippine National Construction Corp. and PNCC Skyway to move the management of the 35-kilomter Skyway system to privately-held Skyway Operations and Maintenance Corp. (Skyway O&M). Skyway O&M recently took control of the toll road. The union contended that the ASTOA was "contrary to law and grossly disadvantageous to government and the Filipino people." PSEU president Jose Apollo Ado said on Thursday that PNCC and its completely-owned Skyway Corp. subsidiary did not fulfill the "security of tenure" deal it made last August with the union. Ado pointed out that management vowed the absorption on all workers will be included in the memorandum of agreement. Skyway Corp. CEO Wilfredo P. Cu, stated, though, that there was not such deal.
(http://www.bworldonline.com/BW010408/content.php?id=044)

CSX Fined for Safety Violations, Including Bullitt Derailment
Louisville Business First (01/04/08)

The U.S. Federal Railroad Administration fined CSX Transportation Inc. $350,000 for violating rail safety regulations that led to a series of train accidents and five train derailments between December 2006 and January 2007. One derailment in Brooks, Ky., caused nearby neighborhoods to evacuate due to noxious fumes, two runways at the Louisville International Airport to close temporarily, and a shutdown of 23 miles of Interstate 65. United Parcel Service also reported the derailment interfered with its tractor-trailers ability to reach the airport. The administration conducted a thorough safety inspections across the CSX network, and government regulators noted significant strides on behalf of the company to improve safety inspections and install detection systems to identify problems early.
(http://louisville.bizjournals.com/louisville/stories/2007/12/31/daily21.html)

Plus to Open Maiden Mumbai Highway Project in Q1
Business Times Singapore (01/01/08)

Plus Expressways Bhd is preparing to launch its first highway project in Mumbai, India, in the initial quarter of this year. Plus is said to be changing the 21.6-kilometer road into a four-lane toll road. The project, worth $43 million, entails an area of highway encompassing the towns of Bhiwandi, Kalyan, and Shil Phata. Plus is funneling its revenue away from the North-South Expressway (NSE) and actively seeking toll-road ventures in Singapore and overseas. The firm's most recent acquisition is the 17-km Butterworth-Kulim Expressway (BKE) from MMC Corp. Bhd. BKE's outlook is said to be good, as the building of the Northern Corridor Economic Region and the Kulim High Tech Park was expected to increase its traffic level. A more important project for Plus is the 116-km toll road between Cikampek and Palimanan in Java, Indonesia, which is set to be finished in three years.
(http://business-times.asiaone.com)

Corzine to Tour for Plan to Cut Debt With Toll Roads
New York Times (01/01/08) Peters, Jeremy W.

Gov. Jon Corzine is getting ready to travel the state to tout his plan to lower New Jersey's debt by refinancing the state's toll roads. The 21-county tour will provide residents with the opportunity to ask Corzine about his proposal, which he has said he will explain during his State of the State speech on Jan. 8. While he had frequently described the plan as the best way to reduce the over $30 billion in New Jersey debt by more than 50 percent, not much is known about what this plan would entail. It is known, however, that it would call for borrowing funds by utilizing toll hikes as collateral. Tolls on state roads, including the Garden State Parkway and the New Jersey Turnpike, would rise substantially in the future, although Corzine has not mentioned specifics. While Corzine and New Jersey lawmakers originally thought about selling or leasing the toll roads, the plan he is preparing to announce will not include either of those ideas. Corzine will conduct town-hall forums throughout New Jersey that are meant to inform the public about the economic-restructuring plan and dispel any misperceptions.
(http://www.nytimes.com/2008/01/01/nyregion/01corzine.html)

Texas Transportation Commission Chairman's Death Could Upend Toll-Road Debate
Dallas Morning News (01/01/08) Lindenberger, Michael A.

Texas Transportation Commission chairman Ric Williamson's death from a heart attack on Dec. 29 could influence the outcome of the debate concerning toll roads in Texas in 2008. In recent years, Williamson became a controversial figure as he attempted to allow private firms to construct and manage toll roads in the state. Texas Senate Transportation Committee chairman Sen. John Carona says he hopes that Williamson's successor will back increasing gas taxes to help counter the need for tolls. Williamson concentrated on discovering a way to finance the new roads and additional lanes that the state's expanding metropolitan regions need. Williamson recently stressed that new roads in the state would have to be toll roads. A new panel will look at the idea of private toll roads in 2008 and report to the Texas Legislature. Also, an independent sunset review commission will start an in-depth examination of the Texas Department of Transportation that every state agency must undergo every dozen years. It is uncertain who Williamson's successor will be.
(http://www.dallasnews.com/sharedcontent/dws/news/texassouthwest/stories/DN-txdot_01met.ART.State.Edition2.36ec7ba.html)

U.S. Department of Transportation Approves Nearly $1.2 Billion in Credit Assistance to Relieve Congestion on I-495 Capital Beltway
U.S. Department of Transportation (12/20/07)

Almost $1.2 billion through a direct loan and tax-exempt private-activity bonds from the U.S. Department of Transportation (DOT) will help launch construction of high-tech express lanes on the Capital Beltway in Virginia under DOT's Transportation Infrastructure Finance and Innovation Act loan program that encourages the participation of the private sector in the financing of new highway projects by offering flexible repayment terms. Under the program, private companies building and operating public facilities can borrow up to $15 billion on a tax-exempt basis to construct highways and some freight facilities. For the Capital Beltway project, estimated to cost $1.9 billion, private companies Transurban and Fluor Enterprises will finance and operate the 14-mile project, which will include the construction of two additional lanes on each side of the Beltway and the conversion of the existing middle lanes to high-occupancy-toll lanes with prices that will change according to traffic volume in a bid to reduce congestion. Revenues raised by the companies will be used to repay the loan and bonds. "By embracing the powerful mix of technology and private sector resources and expertise, thousands of drivers currently stuck in traffic every day will enjoy the freedom of free-flowing lanes on one of the nation?s most congested highways," says Transportation Secretary Mary Peters.
(http://www.dot.gov/affairs/fhwa2107.htm)

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